Down, Down, Down

October 6, 2008

Everything went down today...and everywhere. Except
oil which ended at $88 a barrel. Some suit visiting on NPR tried to
explain why this was bad. It's not. The decline in crude is the only
hopeful sign we've seen in months. Some businesses may be encouraged
to start up and invest again if the petroleum prices permits them to do
so.

Well, that's not exactly right. The overstoked stock markets in China
and Russia are also plummeting, and the Moscow bourse was forced to
stop trading twice during the day. This should give us some confidence
that these two government-manipulated exchanges are not immune to the
forces that have affected Wall Street and the City. Take whatever joy
that is available. But don't go haywire: This may be the last good news
we get for the foreseeable future.

At about 2:30 this afternoon, the Dow industrials were down almost 800
points bringing the market to near-9500 and ending up below 10,000 for
the first time in years. David Leonhardt argues in the Times
on-line that the S & P 500 is a much more salient index than the
Dow. It is heading downwards to half its high while the Dow is heading
south by only a measly third. You want a calamity: you'll have one.

John Fuld, the CEO of Lehman Brothers, made his own calamity. But he
cushioned it for himself and his partners by siphoning off millions and
millions--no, tens of millions--as bonuses while asking the Fed for
rescue from the very choppy waters into which he had pushed his bank.
They got the bonuses. But the bank sunk from view.

But I did have some pity for him nonetheless. He was being questioned
by Henry Waxman's House committee. Waxman was, as usual, being both
pointed and courteous. But two loud mouths--I do not recall their
names--put Fuld to the stocks. They wanted him to pillory himself.
"Answer 'yes' or 'no'," they bellowed without giving him a second to
respond.